TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 123
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....03) 262 ITR 260. 3) The appellant craves to be allowed to add any fresh grounds of appeal and/or deleted or amend any of the grounds of appeal." 2. Adverting first to ground nos.1 & 2 in the appeal, facts in brief, as per relevant orders are that assessment in this case was completed on an income of Rs.14,39,580/- vide order dated 18th December, 2009 u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act), in pursuance to return declaring nil income filed on 25.09.2007. During the course of assessment proceedings, the Assessing Officer (A.O. in short) noticed the following amount of Rs.14,32,57,724/- was received by the assessee by way of unsecured loans from M/s Duce Properties and Services Pvt. Ltd. (now known as M/s Jindal Reality Pvt. Ltd.)[Duce in short] otherwise than by account payee cheques or account payee bank draft, as stipulated in section 269SS of the Act.: S.No. Date Amount [In `] 1. 11 August, 2006 8,03,250.00 2. 11 August, 2006 1,32,53,750 3. 17 August, 2006 2,58,87,563 4. 17 August, 2006 14,24,820 5. 17 August, 2006 2,36,64,188 6. 17 August, 2006 16,16,100 7. 17 August, 2006 2,38,75,940 8. 17 August, 2006 13,19,700 9. 17 Augus....
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....ubstantial interest in the appellant company. The same has been a finding and justification for deleting the penalty u/s.271D, which is not the case, as far as the assessee is concerned. Further the assessee has not given any proof of the copies of the cheques being account payee to the relevant parties to whom the payment has been made on behalf of the assessee. The bank account submitted by assessee merely reflects clearing of amounts and no mention regarding payment to parties is there in the bank account. The bank account states regarding clearing of amounts with a narration as under: " MICR inward, HT House New Delhi", which has no meaningful or justifiable interpretation vis-a-vis the: payments/made to seller of the land through ale payee cheques. Thus as the assessee has not given any bonafide evidence regarding account payee cheque, therefore the decision of Hon'ble High Court of Delhi is not applicable in the case of the assessee. Therefore the assessee's contentions on application of judgment in its case is rejected. (v) The decision of Hyderabad bench in the case of Hamarashehar Co. Pvt. Ltd. vs. Additional Commissioner of Income-tax is not applicable as in that case ....
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..../s Duce Properties & Investment Pvt. Ltd. (subsequently known as M/s Jindal Realty Pvt. Ltd.) for developing of residential township at village Rathdhana in Sonepat. Under the said agreement, M/s Duce has provided necessary finances for purchase of land by the appellant company. The payment has been made by M/s Duce to the land-owners (farmers) directly by account payee cheques on behalf of the appellant company for purchase of the said land for the township project. The amount totaling Rs.14,32,57,724/- is shown in the books of the appellant as unsecured loan from M/s Duce for the year ending 31.03.2007. It is argued by the Id. AR that necessary disclosures in this regard have been made in the Balance Sheets of both the appellant company and M/s Duce for the year ending 31.03.2007. It is argued by the Id. AR that the appellant company did not maintain any bank account during the year under consideration and that the payments have been made by M/s Duce directly to the farmers vide account payee cheques and no cash loan whatsoever has been received by the appellant company from M/s Duce and hence section 269SS read with section 271D is not attracted. It is argued that the case is co....
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....cases where unaccounted cash found during search operation was sought to be explained by the taxpayers as representing cash loans/deposits taken from various parties and to prevent unaccounted income being introduced in the books of tax payers through such loans/deposits. Therefore, the argument of the Id. AR that said provisions of section 26988 would not apply to the instant case where the transaction is done through journal entry between the appellant company and its sister concern who are regularly assessed to income tax and out of the funds available in the bank account of the sister concern cannot be denied. The case is clearly covered by the decision of Hon'ble jurisdictional Delhi High Court in the case of CIT v. Noida Toll Bridge Co. Ltd. (2003) 262 ITR 260 wherein under very similar circumstances, the Hon'ble High Court dismissed the appeal filed by the revenue confirming the finding of the ITAT that as no cash loan was involved, penalty u/s 271 D cannot be imposed. The decision of the Hon'ble High Court is reproduced hereunder: "This appeal by the Revenue under section 260A of the Incometax Act, 1961 (for short "the Act"), is directed against the order, dated May 16, 20....
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....ayee cheque, (ii) no payment on account was made in cash either by the assessee or on its behalf, (iii) no loan was accepted by the assessee in cash, and (iv) the payment of Rs. 4.85 crores made by the assessee through IL & FS, which holds more than 30 per cent. of the paid-up capital of the assessee, by journal entry in the books of account of the assessee by crediting the account of IL & FS. Having regard to the aforenoted findings, which are essentially findings of fact, we are in complete agreement with the Tribunal that the provisions of section 269SS were not attracted on the facts of the case. Admittedly, neither the assessee nor IL & FS had made any payment in cash. The order of the Tribunal does not give rise to any question of law, much less a substantial question of law. We accordingly decline to entertain the appeal. Dismissed." Considering the above and respectfully following the judicial precedents as mentioned above and relied upon by the ld. AR,I find that the impugned penalty is not sustainable either on facts or in law. The same is, therefore, deleted." 4. The Revenue is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld. DR suppo....
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....of s. 269SS of the Act, it is necessary that there should be transfer of money, which is not in the instant case. Therefore, in our view, the claim of the Revenue that since the loan or deposit is not as per mode prescribed under s. 269SS of the Act, there is violation of the said provisions, cannot be accepted. In this case , it is undisputed fact that all the transactions mentioned in para 2 above were through book adjustment . There is nothing on record to indicate that the assessee had indulged in any tax planning or tax evasion nor there is anything to suggest that by making the book entries the assessee has made the adjustment mala fide. There is nothing on record to show that the transactions were attached with certain conditions or stipulation as to period of repayment, rate of interest, manner of repayment, etc. . 5.2 . The provisions of section 269SS were brought in the statute book to counter the evasion of tax in certain cases, as clearly stated in the heading of Chapter XXB of the Income-tax Act, 1961 which reads "REQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX". Legislative intention in bringing section 269SS i....